World prices for agricultural commodities fell a further 2.2pc in November, according to the latest Westpac-NFF Commodity Index report, and follows on from a 1.3pc drop in October as the global economy continues its slump.
But the Westpac-National Farmers' Federation report says agricultural commodities are still buoyant; it is the credit squeeze which is precipitating major declines in world trade.
Westpac senior agribusiness economist Andrew Hanlan said the fall in the value of the Australian dollar had cushioned the drop in commodity prices for Ausrtralian farmers - commodity prices in Ausside dollar terms are only down 3.4pc for the year.
NFF vice-president Charles Burke said the fundamentals for agriculture remain positive due to the globe's population growing by 100 million people a year, at the same time as world food production falls.
Mr Burke warned that a return to protectionist trade policies would be a knee-jerk response to the global economic crisis.
"Now those very policies that have failed time and time again could plunge the world deeper into chaos," Mr Burke said.
"It is now, during this time of economic uncertainty, that those countries still dragging the chain on trade liberalisation must break the shackles of their misguided and petty self-interest.
"Average tariffs for agricultural goods are already more than three times higher than for non-agricultural goods.
"At the same time, antiquated and anti-competitive domestic support policies among many of our global trading partners have brought on, and exacerbated, the food shortage."
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